Crash Tax

On June 15, the Chula Vista City Council postponed passing a resolution that would potentially affect anyone driving in the city of Chula Vista. After many residents expressed concern about the consequences of passing the resolution, council members voted 4-1 to do more investigation.

The resolution proposes to contract out services for billing and collection to Fire Protection USA, LLC. The company would go after at-fault drivers and try to recover costs from insurance companies for “motor vehicle accidents; including response equipment and staff to secure, cleanup and/or dispose of any hazardous waste.”

The Chula Vista Fire Department is promoting the contract in the hopes of building an equipment-replacement fund. Background information provided to the council by fire chief Dave Hanneman states, “the fire department responds to approximately 420 traffic accidents each year in which hazardous liquids are released.” Because environmental protection has become more costly, the department is seeking mitigation. Revenue from this contract would be at least $100,000 per year. Fire Protection USA’s fee for collecting would be between 17 to 20 percent, depending on gross receipts.

The website for Fire Recovery USA lists Troy Walsh as the CEO of the company. Walsh developed and marketed a tool used by firefighters called the “hose tamer” and worked for five years for Thermo Fisher Scientific, Inc., where he “was responsible for promotion and sales of large-ticket fire and medical equipment to cities and fire departments.” Walsh did not return my phone call.

Ed Herrera, president of the Chula Vista Civic Association, says, “It seems that when city hall can’t pass a tax on its citizens legitimately, it looks toward the back door to do so.” In a recent interview, Herrera told me that this “crash tax” is a double taxation because residents already pay for first-responder services through property and income tax.

On another point, Herrera said, “We’ve been working very hard to develop tourism in this city. What about the tourists and people who come to dine in our city? This crash tax really delivers a black eye.” Herrera also believes residents are being misled because “on closer inspection of the actual contract, we’re approving a five-tier program. The first tier [or charge] is simply an on-scene investigation.”

A speaker from the San Diego Taxpayers Association told the council that this collection practice has already been banned or limited in ten states. (Mayor Cheryl Cox clarified that the practice has been limited, not banned.)

Insurance rates were a common concern for many residents who spoke. Fire Recovery USA would not go after uninsured drivers. One speaker said, “This sends a bad message.” Another speaker said she had called her insurance carrier (State Farm) and been told that premiums would likely go up if the resolution passed. Councilmember Steve Castaneda said he could not support the measure “if it will have an effect on all of us who drive here in Chula Vista.”